FINC 577 Chapter 9 Notes Outline

Contains three sections cash cash receipts cash cash

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Unformatted text preview: tains three sections: Cash Cash Receipts, Cash Cash Disbursements, and Financing Financing. Shows beginning and ending cash balances. Chapter 9-33 Financial Budgets: Cash Budget Basic Format Chapter 9-34 Financial Financial Budgets: Cash Budget Cash Receipts Section: Includes expected receipts from the principal sources of principal revenue – usually cash sales and collections on credit sales. Shows expected interest and dividends receipts as well as proceeds from planned sales of investments, plant assets, and capital stock. Cash Disbursements Section: Includes expected cash payments for direct materials and expected labor, taxes, dividends, plant assets, etc. Financing Section: Shows expected borrowings and repayments of borrowed expected funds plus interest. Chapter 9-35 Financial Budgets: Cash Budget Example – Hayes Company Assumptions (1) January 1, 2011, Cash balance: $38,000. (2) Sales: Collect 60% in quarter sold; 40% in next quarter; collect December 31, 2011 Accounts Receivable in Quarter 1. (3) Expected sale of short term investments: $2,000 in Quarter 1. (4) Direct Materials: Pay 50% in quarter purchased; 50% in next pay December 31, 2011 Accounts Payable in Quarter 1. (5) Direct Labor: pay 100% in quarter incurred. (6) Manufacturing Overhead and Selling/Administrative Expenses: Pay (except depreciation) in quarter incurred. (7) Expected purchase of truck: $10,000 cash in Quarter 2. (8) Estimated...
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This document was uploaded on 01/19/2014.

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